Underperforming unit overshadows Wood's upbeat pledge

Click to follow
The Independent Online

The oil services group John Wood has warned that a unit it bought a year ago for close to $1bn (£646bn) was not performing as well as hoped, overshadowing promises of in-line group earnings this year and good growth in 2012.

Wood, which builds oil rigs and pipelines and whose equipment is used in shale gas drilling, said yesterday it continued to see strong market conditions thanks to high oil and gas prices.

"We are not witnessing any material change in customer behaviour as a consequence of volatility in financial markets," it said.

The firm said its engineering and GTS maintenance divisions performed ahead of expectations, but its oil production services unit Wood Group PSN fell short in the second half due to losses in Columbia and delays on an Oman development due to struggles in recruiting 2,000 staff because of the Arab Spring.

Wood's shares fell as much as 5 per cent after the statement, but closed down 1 per cent at 628.5p.